Intuit Index Shows Uptick in Small Business Employment

Small business employment grew by 0.1 percent in May, equating to a 1.6 percent annual growth rate, according to a new Intuit Small Business Employment Index.

This translates to approximately 25,000 new jobs in May and a revised estimate of 240,000 total new jobs since October 2009. Intuit released the monthly report based on figures from about 50,000 U.S. small businesses that use Intuit Online Payroll.


The data also shows an increase in compensation per worker, which continues to show signs that a recovery is underway, according to the data. Compensation grew by 0.3 percent in May and is now $2,566 per month, compared to a revised estimate of $2,559 per month in April.

 Monthly hours worked declined by 0.1 percent in May to 101.6 hours compared to a revised estimate of 101.7 hours in April. This translates to wages of about $30,800 per year for all employees and a 23.5-hour week for hourly employees

 "Hours worked for hourly employees dropped slightly this month after rising a little last month, but the drop was enough to pull the trend down,” said economist Susan Woodward. “The good news though is that hours per worker are falling at a slower rate.”

Small Firms Can Use Claims Against BP Oil as Collateral

Sen. Mary Landrieu, the Louisiana Democrat who chairs her chamber's small business committee, held a hearing this week on the BP oil spill's impact on small firms.

It was revealed during the hearing that small businesses have the ability to use claims against BP as collateral for small business loans under authority at the Small Business Administration. However, BP says it prefers claimants to file directly with the company instead of with the SBA.

AT&T Focuses on Mobile Platforms for Small Businesses

AT&T hosted a small business event in downtown D.C. this week in celebration of National Small Business Week.

At a packed event at its Chinatown store, a group of about 40 or so entrepreneurs debated the pros and cons of Blackberries and iPhones.

The crowd included the owner of a swimming pool service firm, a night club owner, an online magazine developer and many more. It was a nice mix of suits, dreadlocks, tattoos, the flamboyant and the understated. No one was shy – but then again we’re talking entrepreneurs.

Entrepreneur Mario Armstrong moderated the event and helped answer audience questions like “how do I make my Web site more mobile friendly?”

He mentioned he uses WordPress, which offers tons of plug-ins to make content more mobile friendly.  It’s also a good idea to ask yourself whether you want to make your Web site more accessible on a mobile device or do you want to make your own mobile app?

Some of the audience members groused a little about the iPhone having less robust apps than the BlackBerry, but AT&T Vice President Walt Rivenbark, who also fielded questions, basically said just sit back and relax – the BlackBerry has been around since about ’98 and the iPhone is “just getting its footing.”

Armstrong reiterated that a blog should be the center of any business owner’s social media strategy with other social media like Twitter as the spokes.

Rivenbark said he’s seen a big uptick in iPhone app use by service industries like pool firms, plumbers, auto glass repairs and HVAC repair firms.

Cathy Martine, AT&T executive vice president of small business solutions, also was on hand to discuss the company's newly announced Tech Support 360 Backup and Go, an unlimited storage online data backup service designed for small businesses and tailored for mobile devices.

New Bill Would Change Salon Tax Rules

Small business committee Sens. Mary Landrieu (D-La.) and Olympia Snowe (R-Maine) have introduced a bill that would enable the salon industry to have the same tax rules on tips paid to employees as is allowed in the restaurant industry.

“Salons are quintessential small businesses on Main Streets across America, and by extending the tip tax credit to salon owners we would be allowing them to reinvest in their businesses and employees and create new jobs,” said Snowe.  “Furthermore, since 84 percent of the workforce in the salon industry is female, this issue has special relevance for women.  Our legislation would increase compliance with payroll tax obligations and will make sure that the women who work in the salon industry earn all the Social Security retirement and disability benefits that should available to them.”

The tax credit contained in the Snowe-Landrieu bill is designed for employers to offset the matching Social Security and Medicare taxes that the salon pays on the tips that employees receive from customers. The lawmakers say the bill would help to balance IRS enforcement of laws on payroll and income taxes. 

The Small Business Tax Equalization and Compliance Act, S. 3430, is supported by the Professional Beauty Association, the largest association in the professional beauty industry.

New 1099 Regulations Will Hit Small Firms Hard

As a freelancer, I'm all too familiar with Form 1099, a tax form generally used by firms to pay independent contractors.

According to a new law set to go into effect in 2012, business owners will be required to submit a Form 1099 for every payment made via check or credit card to vendors for services, inventory or property over $600 annually.

A National Association for the Self-Employed survey found that the self-employed and firms with fewer than 10 employees are expecting this new regulatory burden to greatly or somewhat increase the amount they spend on tax preparation.

According to NASE’s survey, micro-businesses reportedly received an average of four 1099s from clients or customers and issued an average of two Form 1099s to contractors in the most recent tax year. 

Small-business owners have estimated that they will have to issue roughly 27 Form 1099s, mostly to large corporations, thanks to the new regulations. This is a 1250 percent increase in the amount of paperwork that will be required of small-business owners come 2012.

“To the mom and pop shop, time is money, and this new regulation is going to require plenty of both,” said Kristie Arslan, NASE executive director of legislative offices. “The bottom line is that the Form 1099 expanded reporting requirement affects companies small and large, increasing the number of forms issued and received many times over.”

As part of the new expanded Form 1099 reporting requirement, businesses will be required to obtain accurate Taxpayer Identification Numbers from all qualifying vendors. Should the business owner be unable to do so, they would be required to withhold a portion of that vendor payment and send it to the IRS. With over 40 percent of survey respondents still preparing their taxes on their own, this added administrative workload will significantly increase the time business owners spend on paperwork and/or force them to hire an accountant, adding to the cost of doing business in this difficult economic time, according to the NASE.

Dell Preps to Sell iPad Competitor Called the 'Streak'

Small businesses have been racing to make apps for Apple's iPad but soon there will a new game in town. Texas computer maker Dell plans to start selling the Streak, a tablet computer.

The new tablet will use Google's Android operating system.

Dell plans to sell the first of its tablets in the United Kingdom next month. Later in the summer, the tablets will be for sale in the United States.

Senators Request Information on SBA Microloan Program

Senators Mary Landrieu (D-La.) and Olympia Snowe of Maine, who are the chair and ranking Republican of the Senate Committee on Small Business and Entrepreneurship, today sent a letter to Small Business Administration chief Karen Mills requesting information on the SBA’s microloan program.

They requested information regarding funding that was provided through the American Recovery and Reinvestment Act.

With the ARRA funds only available through Sept. 30, Sens. Landrieu and Snowe requested answers to the following questions:

• When did the SBA first obligate these funds?
• How much money to date has obligated?
• When will the remaining funds be obligated?
• How many requests did the SBA receive for funding?

In FY2010, President Obama appropriated $25 million to the microloan program. However, fiscal 2011 only requests $13.8 million, a drop of $11.2 million. But the SBA plans to bring approximately 30 new lending intermediaries into the program.

“In light of this reduction, we are interested in learning how the SBA plans to sustain its support of these additional intermediaries following the expiration of ARRA funding on September 30, 2010,” the senators wrote.

Borrow Her Husband? What a Great Idea!

I stopped by the Community Business Partnership's award luncheon for the best business plan for a new small business.

Julia Scrivens accepted first prize in the business plan contest for her new firm BorrowMyHusband.net.

Her business, which she started with her husband Anthony Scrivens, focuses on property owners, single parents and others who might need a handyman to fix a range of services such as garbage disposal replacement, ceiling fan repair, drywall or plumbing.

The concept for BorrowMyHusband started when a friend complained that her husband wasn’t getting to the fix-it tasks around the house and Julia Scrivens said “Borrow my husband!”

The partnership, a non-profit based in Springfield, Va., provides classes, technical and other assistance to small business owners with a focus on low-moderate income and disadvantaged individuals, including minorities, women and the disabled.

Zappos Online Pricing Goof Shows E-commerce Gone Awry

Amazon.com unit Zappos, which sells shoes, clothes and other items online, made a big costly error recently that goes to show why paying attention to technology and e-commerce is important for a business of every size.

In a blog post, Zappos said a pricing engine mistake at its web site allowed all items on the site to be no more expensive than $49.95 for six hours early Friday morning. That tech glitch cost the firm about $1.6 million.

No need for customers to worry. Zappos said it would honor all purchases made during the online pricing goof.

Business Startups Reach Highest Level in 14 Years

I like the entrepreneurial attitude, and it's shown to its fullest in new data from the Kauffman Foundation. The group released a new study showing that last year business startups reached their highest level in 14 years. That exceeds the number of startups during the peak 1999 to 2000 tech boom.

Entrepreneurship rates by race show that African-Americans experienced the largest increase in entrepreneurial activity between 2008 and 2009, according to the Kauffman Index of Entrepreneurial Activity. Rising from 0.22 percent in 2008 to 0.27 percent in 2009, the rate was the highest over the 14 years of reported data but remains below other racial groups. Latinos and Asians experienced declines in entrepreneurial activity rates.

Entrepreneurship growth was highest among 35 to 44 year olds, rising from 0.35 in 2008 to 0.40 in 2009. The oldest age group in the study (55-64 years) also experienced a large increase in business-creation rates from 2008 to 2009, contributing to a two-year upward trend to 0.40.

The number of new U.S. businesses created during the 2007–2009 recession years increased steadily year to year. In 2009, the 340 out of 100,000 adults who started businesses each month represent a 4 percent increase from 2008.

In 2009, 558,000 new businesses were created each month (0.34 in 2009). The index increased for the second straight year, from 0.30 percent in 2007 to 0.32 percent in 2008.

Welcome to Small Biz Watch

Hi. Thanks for taking a look at my blog. I've been a journalist for about 20 years, covering a wide range of issues. I particularly like to write about small businesses, technology, new media and how all of those things tie together.

I'm currently a freelancer writing for a large media firms like CNNMoney.com, The New York Times, washingtonpost.com and TheStreet.com, but I also enjoy writing for smaller, more specialized publications covering issues like intellectual property and broadband.

I hope to use this blog as a more informal place to highlight the many small business owners and entrepreneurs I meet on a daily basis, along with the scads of reports and studies I read that often reveal the pulse of the community and focus on important issues. I also read many business and technology magazines and books and I like to try out new gadgets and services. I hope to let you know how they work for me and how they might work for others.

Prior to my work as a freelancer I was the small business blogger for washingtonpost.com where I wrote company profiles and "how do I..." pieces, covered the House and Senate small business committees, the Small Business Administration, conferences and more. I also worked for eight years as an editor for National Journal covering politics and policy issues of interest to the high-tech community.

As a freelancer, I run my own small business so I truly enjoy understanding and learning from other entrepreneurs. I love the optimistic attitude - often in the face of adversity - and the dedication.

If you're interested in seeing some of my writing samples, small business profiles and other work, please see my web site at www.sharonmcloone.com. I also am on Twitter @smallbizwatch.